Educational institutions must consistently monitor student loan data to determine how many of the school's borrowers who enter repayment on school loans during a fiscal year default prior to the end of the next two to three fiscal years. The cohort default rate (“CDR”) is what educational institutions use to define this statistic and it is based on the percentage of borrowers who are in default. Currently, the Department of Education (“DOE”) monitors the CDR by looking at the first two years of repayment. Recently, congress passed the Higher Education Opportunity Act (“HEOA”) to change this to a three-year CDR. As of fiscal year 2014, the DOE will only determine the CDR based on the percentage of borrowers who enter default within this three-year period. If the CDR for a particular educational institution reaches a certain threshold level, the DOE can impose penalties on the educational institution. In some instances, this could mean the loss of the educational institution's ability to make federal student loans available to students, which could have a major impact on the ongoing viability of the educational institution. Educational institutions also have a desire to keep borrowers current on private loans as well as loans funded by the federal government.
Thus, a need exists for a system and method of, amongst other things, monitoring and tracking the projected CDR of a school's student borrowers, to keep borrowing data current, and to create campaigns specifically targeted to borrowers who are entering repayment, are delinquent and/or at a high risk of defaulting to ensure that they get current on payments or remain in good standing. Although schools do not typically collect payments from student loan borrowers, schools have an interest in counseling their students and former students about which entities are servicing their student loans, repayment options that may be available, and any other assistance that a school can provide to prevent them from defaulting.